The term excise duty means a special type of tax on the consumption of certain products such as alcohol and alcoholic beverages, tobacco products and tobacco products, and energy and electricity, and is paid independently of value added tax. Excise products participate to a significant extent in cross-border traffic and are subject to tax evasion, therefore special care is taken in all countries when taxing these products. The research problem in this paper is to what extent the taxes and excise duties applied by the Republic of Croatia for the taxation of tobacco products and tobacco products in the Republic of Croatia comply with the legal acquis of the European Union and what is their significance for the state budget of the Republic of Croatia. The theoretical part of the work was related to the definition of excise duties and their differentiation in relation to value added tax, as well as the application of excise duties to the sale of goods in the Republic of Croatia. In order to approach the research problem in as much detail as possible, the paper defines and separates terms about the market of tobacco and tobacco products, their turnover and excise duties in the Republic of Croatia, as well as the excise duties to which they are subject in the European Union. The thesis showed that business revenues in 2021 amounted to around HRK 150 and a half billion, which represents an increase of almost 15% compared to the previous year. The growth of the operating income of the state budget was accompanied by the growth of income from tobacco products. Consequently, the year 2021 resulted in HRK 5.77 billion in revenue. Also, it was shown that with regard to the harmonization of excise duties, the Republic of Croatia has adjusted some items to those from the EU, while some are still below the prescribed minimums.